When you are planning for you future, it is likely that you will create an estate plan so that you know your assets are safe and under your control even after you are gone. As you are going through the process of estate planning, you will need to name a power of attorney.
Durable vs. non-durable power of attorney
A non-durable, or general, power of attorney is someone you assign to act and speak as if they were you on matters of finances. A power of attorney can help you with your business interests and other affairs if you are not able to. This individual will have the right to act on your behalf in legal capacity. For example, if you are headed out of the country, you can have the agent of your power of attorney manage your estate while you are away.
A durable power of attorney also has the ability to manage your affairs but keeps this power if you become mentally incapacitated or ill to the point of inability to make cognizant decisions. A nondurable power of attorney would become null if you were to become physically or mentally ill.
Limited power of attorney
This type of power of attorney is used when you only want to give your “agent,” or person that you are giving power to, authority of one aspect of your estate. For example, you want to sign a contract, but you will be out of state. You can have your limited power of attorney sign it for you. The contract will act as though you were signing it yourself.
Springing power of attorney
A springing power of attorney acts as an “if, then” document. It only goes into effect after a specific event happens. For example, you may create a springing power of attorney that states that if you become incapacitated, then your agent can manage your affairs. This is similar to a durable power of attorney, but only goes into effect after a certain clause is met.